QS Research · Michael Burry's Scion Capital analyst template · 2006
Vertiv Holdings Co (VRT)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case 0% · downside -24% · upside +7%
The market is not missing the AI infrastructure boom: Q3 2026 sales rose 61.2%, organic orders more than doubled, and FY2026 guidance was raised to $14.45-$14.85B sales and $7.10-$7.20 adjusted EPS, yet the stock is 52.6% off its high. What it is still paying for is that growth: at $180.25 VRT is 5.25x EV/Sales, 22.5x EV/EBITDA and 33.1x P/E, the richest sales multiple in the peer table. On section 13's TTM EBITDA base of $3.06B, the current 22.5x multiple gives roughly today's price; 17x gives $137 (-24%) and 24.1x gives $193 (+7%). I keep that TTM base because the forward guide is non-GAAP with no reconciled forward EBITDA, so the multiple alone leaves no margin of safety and the return must come from EBITDA growth. That makes VRT a watch, not a long or a short: the business is executing, but the price still discounts a lot of the acceleration.
Key numbers
- Share price: $180.25
- Market cap: $69.41B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $13.12B
- EV / EBITDA (TTM): 22.5x
- P/E (TTM): 33.1x
- Price / book: 12.62x
The 15 boxes
- ✓ 1. Long-form business notes
Vertiv sells and services critical digital infrastructure—power, thermal, racks, modular solutions, software and lifecycle services—through three geographic segments (Americas, Asia Pacific, EMEA), with FY2025 net sales of $10,229.9M versus $4,370.6M in FY2020. The mix shifted toward the Americas (62% of FY2025 sales vs 47% in FY2020) and backlog rose to $15.0B at 12/31/2025 from $1.84B at 12/31/2020, with the latest backlog mostly firm and expected to ship in 12–18 months. The portfolio has expanded from power/thermal/rack/modular systems in FY2020 to include low/medium voltage switchgear, busbar, liquid cooling and energy storage by FY2025.
- ✓ 2. Competitive advantage
Vertiv's edge is scale and service density, not price: operating income went from $223.4M in FY2022 to $1.83B in FY2025 on revenue of $10.23B, and FY2025 operating cash flow was $2.11B against $220.0M of capex. The stated moat is the service footprint (about 5,000 field engineers, more than 300 service centers, a first-time fix rate above 90%), the broadest product portfolio and $441.7M of 2025 ER&D spend, backed by a $15.0B backlog at 31 Dec 2025. But management itself says competition is on reliability, quality, price, service and relationships, names Schneider, Eaton, Legrand and Huawei as global rivals, and flags a highly competitive environment. The margin record proves operating leverage and pricing execution, not a toll-booth franchise.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) showed net sales of $4,312.8, up 61.2% year over year, with operating profit of $983.8 versus $516.7 and gross margin of 38.1% versus 37.8%; SG&A fell to 12.9% of sales from 15.5%, so the margin gain came from volume leverage, not price alone. About $156.9 of the quarter's sales were acquisition-related and $17.4 of non-operating income was a mark-up on non-marketable securities, which is separate from operating earnings. Nine-month 2026 operating cash flow was $2,660.6 versus $1,108.9, funded largely by deferred revenue, while capital spending is stepping up to $575.0-$600.0 for FY2026. Liquidity is $3,512.9 of cash plus $198.8 of short-term investments and $2,484.0 of revolver availability; the only risk-factor change flagged is covenant language, including a 4.00:1.00 maximum Consolidated Leverage Ratio.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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